Naira, Dollar notes
The Nigerian Interbank Offered Rates (NIBOR) increased to an average of 14.28 per cent last Wednesday, compared with the 13.19 per cent it closed on the Friday of the preceding week due to shortage of cash from the system.
The market did not open last Thursday and Friday due to the public holiday declared to commemorate the Eid el Kabir celebration.
According to data made available by the Financial Market Dealers Association (FMDA), while the Overnight tenor jumped to 12.21 per cent on Wednesday, compared with the 10.37 per cent it attained the preceding Friday, just as the 7-day tenor also leapt to 12.87 per cent, as against the 11.04 per cent it stood the preceding Friday. In the same vein, while the 30-day tenor climbed to 13.92 per cent on Wednesday, from 12.33 per cent the preceding Friday, the 60-day tenor also increased to 14.58 per cent on Wednesday, from 13.79 per cent the preceding Friday.
Dealers attributed the development to outflow to purchase of forex. A total of N111.274 treasury bills matured last week.
The central bank offered a total of $300 million at its Wholesale Dutch Auction System (WDAS), as against the $330 million recorded the preceding week. But the naira was stable as it closed at N155.76 to a dollar last Wednesday. However, the local currency gained 19 kobo at the interbank as it closed at N157.27 to a dollar, compared with the N157.46 the preceding Friday. The naira was however stable at the parallel market at N159 to a dollar.
Doing Business Report
The World Bank and its private sector arm - the International Finance Corporation – last week ranked Nigeria 131 on the list of 185 countries with ease of doing business. By the current ranking, Nigeria maintained her last year’s position, showing that it did not improve on her ease of doing business in the period under review. Mauritius, South Africa and Ghana came far ahead of Nigeria having ranked 19, 39 and 64, respectively, on the table of 10th edition of Doing Business. Apart from the three countries stated above, others rated above Nigeria included Rwanda 52, Botswana 59, Namibia 87 and Zambia 94. Doing Business, which is a survey conducted across 185 countries, shows how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations.
President Goodluck Jonathan last week emphasised the need to bring more Nigerians into the financial system, stressing that lack of access to finance had been a major limitation to the country’s economic growth. The President also said the citizens of the country must directly feel the impact of growth in the economy, adding that his administration is working towards financial inclusion of all.
He added: “It is important for us to have structures that will enable all Nigerians have access to financial services as well as funds, and we have started programmes targeted at empowering the youth, women and the creative industry.”
The president explained that the financial inclusion strategy of the Central Bank of Nigeria (CBN) would enable more Nigerians have access to funds and help reduce poverty, especially in the rural areas.
The CBN last week said that the total federally-collected revenue stood at N1.021 trillion in August 2012. This, according to the apex bank, represented an increase of 26.4 per cent, compared with the monthly budget estimate of N751 billion and was 3.6 per cent above the receipts in the preceding month. The central bank which disclosed this in its economic report for August, said that the increase relative to the level in the preceding month was attributed to the rise in oil revenue during the review month. At N749.11 billion, gross oil receipts, which constituted 73.4 per cent of the total revenue, exceeded both the receipts in the preceding month and the monthly budget estimate by 18.4 and 35.5 per cent, respectively, the report said.
The Organised Private Sector (OPS) last week slammed the 2013 appropriation bill presented by President Goodluck Jonathan to the National Assembly for not having any clear monetary policy. The OPS, speaking under the umbrella of Lagos Chamber of Commerce and Industry, stated that it would have been useful for the President to highlight the thrust of monetary policy, as this was critical to the realisation of inclusive growth and fiscal consolidation.
The LCCI President, Mr. Goodie Ibru, said: “The inclusion of a monetary policy in the 2013 budget is so much critical now that many businesses are facing severe challenges with regard to access and cost of credit.” He pointed out that the banking system currently has zero tolerance for risk with collateral cover required for loans as high as 200 per cent, stressing that this was stifling private sector growth and the capacity of entrepreneurs to create jobs.
The CBN said it will soon come out with a regulation on microfinance banks that will make the sub-sector effectively play its role in the economy. In fact, Deputy Governor, Financial System Stability, CBN, Dr. Chiedu K. Moghalu, said the banking sector watchdog would soon come out with a new supervisory framework for the sub-sector.
He explained: “There is a regulation of microfinance banks that is on-going. We are coming out with a new supervisory framework for microfinance bank with which there will be unit microfinance banks, States microfinance banks and national microfinance banks. That framework will improve the effectiveness of microfinance banks and their lending efficiency as well.”
Infrastructure Devt Deal
The Africa Finance Corporation (AFC) last week disclosed the completion of a landmark commercial borrowing of $200 million 10-year facility granted by the African Development Bank (AfDB). AFC said it took the credit to enable it diversify its long-term funding sources, leverage its balance sheet, and also increase its capacity to support the development of vital infrastructure in the power, natural resources, transport, heavy industry and telecommunications sectors in Africa. AFC is an African-led multilateral financial institution, established in 2007 whose mission is to improve African economies by proactively developing and financing infrastructure, industrial and financial assets.
The CBN Governor, Mallam Sanusi Lamido Sanusi, and two of his predecessors, Adamu Ciroma and Mr. Joseph Sanusi, last week kicked against the move by the House of Representatives to prune down the independence of the bank and weaken the powers of its leadership. They asked the lawmakers to exercise restraint on the issue as the gains of having a strong independent central bank far outweighs whatever the benefits expected of a weak national reserve bank. The caution came at a public hearing on a bill seeking to amend the CBN Act of 2007. The public hearing was organised by the House Joint Committee on Justice, Banking and Currency.
The Economic and Financial Crimes Commission (EFCC) last week described the private sector in Nigeria as the “main harbinger of fraud and corruption,” in the country. Chairman, EFCC, Mr. Ibrahim Lamorde, had expressed concern that almost all the high profile corruption and fraud cases investigated by the commission were connected to the private sector.
Lamorde added: “Virtually all the high profile corruption and fraud cases investigated by the commission have elements of strong private sector conspiracy and connivance. You will recall the roles played by bank chief executives and their top management which led to the crash of the stock market.
“They deliberately misstated their financial activities to lure unsuspecting members of the public to buy their shares at premium.”